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Subsidy Effects On Private Sector Worry PHCCIMA
The Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), has expressed concern over the deregulation of the downstream sector of the petroleum industry as it affects the organised Private Sector (OPS).
In a joint statement issued by the President of PHCCIMA, Dr Vincent Adonye Kingston Furo and Chairman of PHCCIMA Oil and Gas Trade Group, Chief Franklin Dndison Gbupo the group declared:
“We are of the view that any sector of the economy, like the downstream of Petroleum Resources whose conditions do not promote private sector participation does not represent a good economic decision. This is drawn from the fact that government alone cannot successfully drive that sector. The organised Private Sector (OPS) must be given the right incentive and environment to operate so that one of the advantages of competitive production can play itself out in determining the price of the products in a medium and long term run”.
According to them, an analogy of this position could be seen with the liberalisation of the telecommunication sector, where the early private sector players in the industry like MTN and ECONET started and traded their SIM Cards for as high N16,000 and more.
However, today, with other players (on term) like GLOBACOM and ETISALAT allowed entry, SIM Card price goes now for as low as N100 and is enjoyed by the masses who are benefiting from the boom. This is possibly attainable in the downstream petroleum sector if well harnessed, the group asserted.
Besides, PHACCIMA noted that a good number of private refineries approved by the Federal Government have not been able to take off because of the burden of subsidy on the sector, saying removal of these impediments by government was the rational thing to do to open up the sector to growth, employment opportunities and wealth creation for the smaller businesses.
“Port Harcourt Chambers of Commerce is not unaware of the temporary pains of the short term effects, but this will time out with the medium and long term advantages. We call on the Federal Government to implement Reinvestment and Empowerment Programmes, and to also endeavour to build trust and confidence to show it means well for the people”.
PHACCIMA also indicated its belief that as much as government is of the view that subsidy poses large financial burden on it, the confidence of the people must be gained by fighting corruption, reducing high costs of governance and adequate delivery of their promises to the people.
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